SUGAR FRAUDS. 


GemweeteeboilOC TN PE RESTS, HEALTH 
peewee Faves N USE 


WAYS AND MEANS COMMITTEE INVESTIGATIONS 


(Hon. FERNANDO WOOD, CHAIRMAN,) 


SEPTEMBER 1/) AND-18, 13878, 


AT THE 


NEW YORK CUSTOM HOUSE. 


VERIFIED PACTS AND FIGURES, 


SewHICH SUPPLY =. * 


EVIDENCE or REVENUE ROBBERIES. 


SUGARS & SYRUPS POISONOUSLY ADULTERATED. 


SUGAR DUTY, DRAWBACK, ETC. 


Henry A. Brown, 


1878. 


SUGAR FRAUDS. 


VERIFIED FACTS AND FIGURES 


SOME COMPARISONS WITH 


Mx, Gavomeyer’s and Mls, Emahoey’s Statements, 


BEFORE CHAIRMAN WOODS COMMITTEE, 
Cio bG AM rw) SEIN EVV OTR IK 


September /7th and /8th, 1878. 


The classification of facts produces reliable evidence by the use 
of which great truths may be established, and public abuses and evils 
may be prevented or greatly mitigated until by persistent application 
of the proper remedial forces they may be entirely suppressed ; 
abuses and evils cannot exist except by the sufferance and toleration 
of those whose duty it is to unfold truth and maintain it, regardless 
of personal interests; the moment falsehood and sophistry are sternly 
confronted by evidence and truth they rapidly retreat and dissolve 
into nothingness. 

The representatives of certain sugar interests who testified so 
glibly before Mr. Wood’s so-called Ways and Means Investigation 
Committee of Customs business at New York on the 17th and 18th 
of September, 1878, that no frauds and no adulterations existed in 
the matter of Sugar, and withdrew in consternation after only two 
broadsides had been fired from the ranks of honest importers and 
refiners, who have had intimidation enough, presented evidence that 
truth will prevail against the monstrous abuses, adulterations, and 
frauds in the matter of sugars, which have rioted unchecked in the 
past, and not only robbed the revenue of duty and excessive draw- | 
back at will, but placed poisonous compounds, called refined sugars 
and pure syrups, upon the tables of the people whose treasury these 


2 


sugar ring manipulators have previously robbed, and destroyed hon- 
est importers and refiners right and left to increase their gains from 
such nefarious practices. 

It is no part of the writers purpose to discuss this sugar fraud 
question; between truth and falsehood there is nothing to discuss; 
facts and figures honestly adjusted and properly explained, admit of 
no discussion, and in reality of no reply that will bear analysis. The 
facts and figures presented by Mr. Robert Hewitt, Jr., of the firm of 
Messrs. J. M. Ceballos & Co., sugar importers, before Hon. Fernando 
Wood’s Custom House Committee on the 17th of September, 1878, 
being incontrovertible evidence against the defrauders, were in- 
stantly denied by members of the association, who have since 
endeavored to suppress the figures altogether; casual thought teaches 
that such hasty denial of data requiring large research and careful 
compilation from numberless final official statistics accessible to but 
few was, to draw it mild, a fatal sign of weakness on the part of the 
rejoinder. A prepared statement intended to annihilate Mr. 
Hewitt’s figures was laid before Mr. Wood the next morning by Mr. 
T. A. Havemeyer, of the firm of Havemeyer & Elder, sugar refiners ; 
so far from producing that stunning effect, it simply enables ‘ Truth” 
to convict defrauders upon the evidence of competent witnesses; 
as will be shown in these pages. 

Regarding adulterations of refined sugars and syrups, so’ stoutly 
denied by Mr. Theodore A. Havemeyer and others before Mr. Wood’s 
tribunal; the clear statements and lucid illustrations presented to the 
Representative of the Ways and Means Committee during the inves- 
tigation named, proved too much for the hitherto well organized 
forces under the lead of Messrs. Havemeyer, Humphrey and others, 
and seriously affected the Committee, who incontinently closed the 
sugar investigation with Mr. Booth’s effective testimony against the 
fraudulent practices and manipulations of a great sugar trade 
combination. A brief synopsis of the facts developed, and other 
facts and figures regarding frauds upon the revenue by sugar ring 
operators, and adulterations in the refined article, with a fact or two 
about the polariscope, sugar duty and drawback, will furnish matter 
for the serious consideration of Congress, and information for the 
people who eat the adulterated article, foot the bills, and are taxed 
extra to make up a deficit of millions of dollars per annum, of duty 
stolen and drawback overpaid on a single article of necessity—sugar. 


At Mr. Wood’s enquiry meeting on the 17th of September, 1878, 
Mr. Robert Hewett, Jr., on behalf of honest importers and refiners of 
sugars, whose business has been greatly injured and in many instances 
ruined by defrauders, presented the subjoined statement, which is an 
exhibit based upon faets and figures arranged from official data re- 
corded after the sugars had entered into consumption, and the final 


PON cate of duties, and the eransactions had pie ings closed 


in 1878: 
Mr. HEWEHTT’S STATEMENT. © 

The following data, compiled from records in the Bureau of Sta- 
tistics at Washington, and deductions therefrom, are respectfully sub- 
mitted to the Ways and Means Committee of Investigations of Cus- 
toms’ business at New York, on the subject of Sugars imported and 
entered into consumption in the United States, and duties liquidated 
thereon. 


Sugar importations entered into consumption in the fiscal years 
ending June 30, 1876, 1877, and for New York alone in 1878: 


Weight, Ibs. Duties received. Rate per Ib. 
TBg ect ee aes. 1,561,880,545 $37,625,064 2.41 
1ST ee Jb 1,455, 387,854 34,337,350 2.36 


Sugar importations entered into consumption at New York, fiscal 
year 1878: 
Pex (hitge son bee 1,073,598,1438 Lbs. $24,834,786 2.3131 


—Being 72.86 per cent. of the total importations into the United 
States for the fiscal year 1878. 

New York importations amount to 72.86 per cent. of total for 
1878. New York importations grade above No. 10 D..S. as per esti- 
mate of the commission on the New York Custom House, known as 
the Jay Commission, and the testimony of New York refiners. 

Consequently, at least 72.86 per cent. of total importations are 
above No. 10 D.S. 


Rate of duty on 73 per cent. of total imports, per lb..........-. 2.8125e. 
Rate of duty on 27 per cent. of total imports, per |b.:-... 2.2... 2, 50e. 
A VGPavG, deecnee Loc. Be de Batok OF Laer 2.781.250. 
RECAPITULATION. 
Weight, lbs. Rate per Ib. “Duty received. 
i ae re A ge 1,561,880,545 at 2.41¢. Collected duty . ...$37,625,064 
1,561,880,545 at 2.fa01c, ) Correct duty .. 222. 42, 610, 053 
ROVODUC AISCTOUANCY sec a uy - <-6 Soe a0 dese one es $4,984, 989 
a ek Se ie ae 1,455,387,854 at 2.386¢. Colle sent, duty ... $ 34, 337, 7,350 
1,455,387,854 at 2.7281¢c. Correct duty...... 39, 104, 799 
Revenue discrepancy........ .. oud? Ras udd eh S5,8675449 
AT NEW YORK ALONE. 
LE (eens igen. Le 1,073,598,143 at =—-—s-2.8181e. Collected oe 5338 beets 
1,073,598,143 at 2.7281¢e. Correct duty...... 29,413,339 


MGVENUS CISCTODANCY . 252... Jen be Cases eth. J2it. $4,578;558 


{ 


SUMMARY OF DUTY DISCREPANCIES. 


1876, AMAOUIG SF a scs deste cecal b es ko - canes bees ae eee $4,984,989 
A877, -ATBOUNL . - . cus pa Beeicic aces sinc Eietee pee ee Oa ne 5,367,449 
fers; amount, Newayork: . 220.2: a ee ee eee 4,578,553 


Ttis evident that honest sugar merchants have no occasion to dis- 
pute the above figures, which only mildly portray the extent to which 
frauds in sugar dealings have been carried; nevertheless sugar men 
at once denounced the figures as false altogether, or based upon in- 
voice values,—invoice values, however, have nothing to do with the 
matter, and it is simply Impossible to subvert the figures given with- 
out producing accumulative evidence of frauds on the revenue in 
sugar transactions ; the attempts to denounce and refute Mr. Hewett’s 
figures was in itself evidence of sympathy with revenue robbers to say 
the least. 

‘The above broadside from honest importers, and the straight 
refiners who at once began to gain courage,raked the enemy fore and aft; 
at the opening of Mr. Wood’s court the next day, Sept. 18, Mr. Theo- 
dore A. Havemeyer, handed to the Hon. Chairman of the Ways and 
Means Committee, “a statement in reply to the allegations made by 
Mr. Hewett ;” doubtless Mr. Havemeyer has excellent reasons for 
assuming the defensive in the case, but his so called statement, is 
simply a pernicious manipulation of figures having no bearing what- 
ever upon Mr. Hewett’s figures, except that Mr. Havemeyer found 
himself compelled to use the figures presented by Mr. Hewett, as to 
duty received in 1876 and 1877, in order to obtain a basis for a new 
diversion, doubtless intended to prevent Mr. Hewett’s evidence and 
data from having full effect : : 

Whatever the object may have been, no better evidence of mon- 
strous duty frauds could be procured than Mr. Havemeyer’s statement 
analyzed in connection with Mr. Solon Humphrey’s testimony, has 
added to the overwhelming evidences of frauds before and since accu- 
mulated ; in justice to both these gentlemen, and all others who have 
with them assumed the defensive in this sugar fraud question, the 
statement referred to is given as reported in the New York Herald of 
Sept. 19, 1878. 


Mr. THEODORE A. HAVEMEYER’S STATEMENT. 


“Tt is claimed there has been a falling off in the revenue of sugar 
ot several millions of dollars, and that this is a positive evidence 
of fraud, but the statistics, carefully prepared by the government, do 
not confirm the statement. For the fiscal year ending June 30, 1875, 
there was collected as revenue on sugar $33,380,643 as against $37,- 
625,063 for the year ending June 30, 1876, and $34,337, 350 for the 
year ending June 30, 1877. From these should be deducted the 


5 


amounts returned by the government as “ drawback” on retined sugars 
exported, which makes the following exhibit :— 


1875. 1876. 1877. 
Duties received.....- Pee Lire $33,380,643 $37,625,063 $34,337,350 
Less drawbacks (estimated). 810,000 1,800,000 1,380,000 

Balance................ $32,570,643 $35,825,063 $32,957,350 


This leaves an apparent difference between the years 1876 and 1877 of $2,367,713, 


but the reports of the Bureau of Statistics show— 
tbs, 


That there was of sugar remaining in bonded warehouse June 30, 1875... 565,831,322 
That there was imported during the year ending June 30, 1876............ 1,454,254,633 
Total on hand and imported during the year ending June 30, 1876... .1,98.,085,955 
That there was remaining in bonded warehouse June 30, 1876............. 28:5,343,491 
Which leaves amount of sugar entered into consumption during fis- 
Sal year eudimg dune 9071076 . 2022. ae a os Shea ni fee eb ecioes | 1,62%.,742,464 
That there was of sugar remaining in bonded warehouse June 30, 1876-. "282,343 3,491 
Imported during the year ending June 30, 1877...................--------- 1,58-. 162,924 
Total on hand and imported during fiscal year ending June 30, 1877. 1,867,506,415 
That there was remaining in bonded warehouse June 80, 1877...........-. 33%. 078,645 
Which leaves amount of sugar entered into consumption during fis- 
OHI MERE ONUI Ue DUIS? tat. ses dec ccr eda cs eon ecieicweee tne tae. 1,531 427,770 


Showing a decreased consumption for the fiscal year ending June 
30, 1877, of 104,304,694 pounds. This at an average duty of 2,41 
cents per pound would have produced for the revenue $2,513,984, 
leaving an actual difference of $353,729 between the two years, which 
may be attributed to the facts before given and to the fact that a 
_ greatly increased amount. of sugars. imported during the fiscal year 
ending June 30, 1877, were entered for direct consumption, and hence 
the increased duties paid on them on liquidation of the entries, 
does not appear in the statistics. 
The high prices of sugars ruling during the fiscal year ending June 
30, 1877, oreatly checked and reduced the consumption, and a de- 
creased revenue is the inevitable result of a decreased consumption.” 
It will be evident to any intelligent observer of Mr. Havemeyer’s 
statement, that the deduction of drawback from duty received and | 
the increased consumption claimed therein, add largely to the volume 
of frauds set forth in Mr. Hewett’s correct data; but setting draw- 
back aside for the present, the following tables "exhibit the correct 
figures as presented to Mr. Wood's Committee by Mr. Hewitt, 
measured in accordance with Mr. Solon Humphrey’s statement made 
before the Wood Committee September 18, 1878, in regard tothe grades 
of imported sugars which entered. into consumptier in the United 
States. It should be borne in mind that Mr. Humphrey testified 
that he had “examined into the subject and found the reports of fraud 
to be immensely magnified ; the classifications last year were very ac- 
curate indeed ;” and Mr. Havemeyer stated that “the charges of fraud 
were all bosh.” 


6 


Mr. Solon Humphrey, of EK. D. Morgan & Co., sugar importers, © 
stated in relation to grades-of sugars D.8., that the proportions of 
imported su gars entered into consumption were as follows: 


Of No. 7 D.s , 20 per slike RS, Duty 12c. and 25 per cent. per lb. 
Of No. 10 D. “8. ., 60 to 65 per cent._..----. Duty 2c. and 25 per cent. per lb. 
Above 10 Dd. S., 1 5 0 20 oe Cent. ...2 8 - Average 24ce. and 25 per cent. per lb. 


The following tables are based on the above proportions applied, 
to the actual number of pounds of imported sugars entered into con- 
sumption and the liquidated duty thereon; an average of 24c. per lb. 
is used as duty on sugars above No. 10 D.S. 


Entered into consumption in 1876, 1,561,880,545 pounds. 


20 per cent..... *, 313 3%, 109 Ths. Ov ise. scents eam Gee $5,466,581 91 
, Add 28 per cents... 202-22. 1,366,645 48 
——_—_—_— $6,833,227 39 
65 per cent... ih ag 1,015, 222,354 Ibs: at 20... 2.2 22200 EE Sah Pitch oad. 20,304,447 08 
Add 25 per cent. et ae ee 5,076,111 77 
| ——_—_———— 25,380,558 85 
15 per cent. sy "884. 282, 082 Ibs. HO aC oon dee eee oie ce he es 5,857,052 05- 
Add 25 per cent........... 1,464,263 01 
pera ak at ——_————— 7,321,315 -06 
1,561,880,545 Ibs. Proper duty...... $39,535,101 30 
Duties liquidated i in 1876. add. gb tin esdseriyss The reece, Duele eee 37,625,064 00 
"1876; "Heveniie discrepancy). J.c. 3... 2 4s fre es Saeeeae $1,910,037 30 . 
Entered into consumption in 1877, 1,455,387,854 pounds. 
20 per cent... Pape pal O71 LDS. At 1G.) 2 Se A RL $5,093j857 48 
‘ ‘Add 25 per Gente2n3-..:.)- 1,273,464 37 
Ms ——— $6,367,321 85 
65 per cent... _.. _ 248,006, 105 Ibs. HE AG. 8 a a 18,920,042 10 
. 4) Add 25 per cent. i2.2cl2 2: 4,730,010 52 
ff: —_—_——— 23,650,052 62 
15®per cent... .. i 308,178 Ibs. at Qic..........-.- tig hpi] 5,457,704 45 
sag 25 per centi...-. RAB: 1,364,426 11 
we ernest coe nih =, 6,829,180 56 
1,455 R87 8 Ted Proper duty...... $36,839,505 03. 
Duties liquidated j in 1877... hea ee che Rye CORN d potecadte Ne ce es aed ee re ee 34, 337, 350 00 
1877,; Revenue discrepancy....:- SE 4 Gu OR Tee ee $2,502,155 03 


Average duity per ‘lb. as per Mr. Humphrey's testimony and Mr. 
Hewett’s figures. In 1876, 2.4090¢e. In 1877, 2.3593¢e. 

Thus according | to Mr. Humphrey, who first stated, as reported, 
that “for the past three years the revenue from sugars have been col- 
lected with an increasing degree of correctness, the classifications last 
year being very accurate indeed,” and then gave the grade proportions 
above named, there. were frauds amounting to $1,910,037. in 1876, and 
frauds amounting to $2,502,155 in 1877. “Mr. Humphrey being hope- 
lessly adrift in Tits, statements, it may be well to bring Mr. T. He Have- 
meyer to his. rescue. . Mr. Hav emeyer, for purposes “of his own, pre-_ 
pared a. tabular, statement for the Wood Committee which has already , 
been presented herein; by referring to said statement it will be ob- 
served that it was claimed that the imported sugars entered into 


7 


consumption during 1876 and 1877 were largely in excess of Mr. 
Hewett’s statement, the liquidated duty being the same in both state- 
ments; therefore, according to Mr. Havemeyer and Mr, Humphrey, 
the following exhibit of evasions of duty on sugars by false classifi- 
cation should be deemed reliable evidence that monstrous frauds upon 
the Custom’s revenue are practiced successfully. 


ANALYSIS OF Mr. T. A. HAVEMBYER’S STATEMENT AND MR. SOLON 
HUMPHREY’S TESTIMONY AS TO SUGARS IMPORTED AND ENTERED 
INTO CONSUMPTION FOR SEVERAL YEARS PAST. 


According to Mr. Humphrey the proportions of imported sugars 
entered into Sous entign 3 are: 


20 per cent. No. 7 D.S......-. Duty. gc. per Ib .2.*: 25 per cent. added. 
65 per cent. No. 10D. S8....... Dutyize. perlby oie 25 per cent. added. 
15 per cent. above 10 D.S..... Average 24c. per lb.... 25 per cent. added. 
Average duty as above would be 2.531250e. per Ib. 
Consumed as per “Proper duty as — Duties received. 
Havemeyer. per Humphrey. Liquidated. 
ACO: 3. 1,635,742,464 lbs. $41,404,731 $37,625,064 
11 1 ea a ae 1,531 ,427,770 lbs. 38,764,265 34,337,350 
3,167,170,234 Ibs. $80,168,996 $71,962,414 


Revenue discrepancy, 1876 and 1877, $8,206,582, 


When such eminent authority on sugar matters as Messrs. Have- 
meyer and Humphreys, unwittingly furnish in their statements, 
proofs of the existence and extent of frauds to evade payments of 
duties on sugars, after testifying in substance there were no frauds, no 
better evidence that Mr. Hewett’s figures of sugar consumption and 
liquidated duty are correct, is requisite ; said fieures are not only of- 
ficial, but are verified. Not only do Messrs. Havemeyer and Humpbh- 
rey’s ‘figures prove frauds amounting in 1876 to $3,779,667, and in 
1877 to $4,426,915, but these gentlemen reduce the rate per lb, of 
duty received in 1876 from 2.41¢. as per Hewett, to 2.3019¢. per Ib.; 
and in 1877 from 2.36¢. per Ib. as per. Hewett, to 2 a ee per lb. as 
per Havemeyer and Humphrey ’s figures. 

Pursuing the analysis of Messrs. Havemeyer and Humphrey’s 
statements in detail, still stronger evidence of gigantic frauds is 
deduced ; when drawback is deducted from duty received in the years 
named the amount of fraud is largely increase d pro rata, and the rate 
of duty per lb. received, is also further lowered ; deducting drawbacks, 
and using. Humphrey’s ‘ste itements, with Havemeyer’s consumption of 
sugar figures, the volume of frauds upon the revenue approximate to 
the actual facts, which will be clearly seen in the following exhibits : 
* Combining the years 1876 and 1877, and using Hewitt’s figures with 
Humphrey’s g evades, the following result is obtained; in this Table the 
drawback figures, liquidated duty, and lbs. of sugar consumed, are from 


8 


the Bureau of Statistics records, after final adjustment in the Treasury 
Department at Washington : 


Entered into consumption. Duties ree’d. Drawback. 
1676C 1,561,880,545 Ibs. $37,625,064 $2,613,525 86 
1877i eels 2 1,455,387,854 lbs. 34,337,350 2,258,959 56 
3,017,268,399 lbs. $71,962,414 $4,867,485 42 
Duties received. Less drawback. Nett duties received. 
$71,962,414 $4,867,485 $67,094,929 


Average rate of duties received, nett, 2.2236c. per lb. 
Mr. Solon Humphrey’s statement of grades entered into con- 
sumption is as follows: 


Of No.7 D.5., 20 per cent. rate of duty....... 1c. and 25 per cent. per lb. 

Of No. 10 D. S., 65 per cent. rate of duty...... 2c. and 25 per cent. per lb. 

Above 10 D.S., "15 per cent. average of duty. Qhe. and 25 per cent. per lb. 
Average according to Humphrey, 2.531250c. per lb. 


Entered into consumption. Humphr ey’s rate. Pyapen duty. 
3,017,268,399 lbs. 2.531250c. per Ib. $76,374,606 
Nett duties received and liquidated..................-... 67, 094, 929 
Two years 1876 and 1877, discrepancy..........-......... $9,279,677 

Less drawback paid in 1876 and 1877. «td. eee ea $4,867,485 485 

Nett discrepancies in 1876:and) 1877... ..1.2..5.0..48.4 ela, $4,412, 192 


In order to give Messrs. Havemeyer’s and Humphrey’s figures full 
scope, the following table exhibits a similar analysis based on Mr. 
Havemeyer’s statement of sugars entered into consumption in 1876 
and 1877, and on Mr. Humphrey’s grade statement: 


Consumed as per .. Duties received. Drawback 
Havemeyer. Liquidated. Payments. 
1S76 fies ite 1,635,742, 464 lbs. $37,625,064 $2,613,525 86 
ASTUTE ry 1, 531, 427,770 lbs. 34,337, "350 2,258,959 56 
3,167,170,234 Ibs. $71,962,414 $4,867,485 42 
Duties received. Less diawback. Nett duties ree’d. 
$71,962,414 $4,867,485 $67,094,929 
Consumed as per Rate of duty per Proper duty 
Havemeyer. Humphrey. according. 
3,167,170,234 lbs. 2.531250c. per lb. $80, 168,996 
Nett duties received and liquidated...................-.. 67,094,929 
Two years 1876 and 1877, discrepancy..............--.--- $13,074,067 
Less drawback paid in 1876 andis77 ete). tien ie $4, 867,485. 
Nett discrepancies in 1876 and 1877.............. 2... cee cne cc eeee $8,206,582 


One other exhibit of the actual figures of sugar consumption and 
liquidated duty thereon in 1876 and 1877, and the approximate to 
actual grade, D. S., of such sugars as furnished by abundant evi- 
dence, testing, and reasonable deductions from the sworn testimony 
as reported, of New. York sugar refiners before the Jay Commis- 
sion in 1877, and substantially by Mr. Humphrey’s statement, and by 
the generally expressed belief of competent importers will for the 
present suffice. 


y 


The evidence proponderates that so far as imported dry sugars. 
enter into consumption in this country, the actual average grade 
thereof measured by the Dutch Standard, is above No. 10; consequen- 
ly the proper average rate of duty cannot reasonably be fixed at less 
than 2,8125 cts. per lb. without stigmatizing the general trade as im- 
porters of the poorest known sugars by preference while England and 
other countries, including the active producers, consume the better 
grades; the following result, [ am satisfied, is below the actual facts 

as regards duty evasions on dry sugars imported and entered into 
consumption in the two fiscal years 1877 and 187%% 


Entered into consumption, Duty received, Drawback paid, 
1877 and 18783 1877 and 18783 1877 and 1878 
3,017,268,399 lbs. $71,962,414 $4,867,485 
Duties liquidated. Drawback paid. Nett duty rec’d. 
$71,962,414 $4,867,485 $67,094,929 
Entered into consumption. Rate of duty. Proper duty. 
3,017, 268,399 lbs. -_2.8125¢. $84,860,678 
Duties received less drawback paid...........2.......2.------- 67,094,929 
Duty discrepancy in two years, 1876 and 1877................-. $17,765,744 
Less drawback paid in 1876 and 1877..........---....2222-.222. 4,867,485 
Nett duty diser epancies, LEVEE WEG BE, oy y BON URE 7 Maa SRE a $12,898 898,259 


The conclusion is inevitable that instead of disproving the figures 
presented to Wood’s Committee by Mr. Hewett, Messrs. “Havemey er 
and Humphrey have furnished data, evidence, and testimony which 
prove that the Government is defrauded of customs revenue amounting 
to several millions of dollars in duty per annum; although the full 
measure of sugar frauds is still greater, here for the present we will 
leave the figures for public consideration, and touch briefly upon other 
topies of the sugar subject. 


VALUABLE TESTIMONY ABOUT SUGAR FRAUDS. 
ADULTERATION OF REFINED SUGARS AND SYRUPS, 


WitH RELEVANT DATA. 

Without entering fully upon the evidence relating to the practice 
of adulteration of refined sugars and syrups, in the case of refined 
sugars exported to obtain drawback in excess of the actual sugar 
product, and in the case of both sugar and syrups, to defraud con- 
sumers in this country by palming upon them poor sugars and syrups 
lightened up to appear of higher grade, by the use of muriate of tin, 
a few facts, and some reference to the valuable and honest testimony 
of Mr. Wm. T. Booth, of the well-known firm of Booth & Edgar, sugar 
refiners, as given before Chairman Wood’s investigating committee 
on the New York Custom House, on the topic of adulterations of 
syrups and sugars, will furnish matter for consideration which can- 
not be too widely circulated. 


10 


During the examination of Mr. Theodore A. Havemeyer by Chair- 
man Wood, the day previous to Mr. Booth’s appearance, Mr. Have- 
meyer is reported to have stated under oath as follows: “ The alleged 
sugar frauds are all bosh.” “ I do not believe that in five years the 
frauds in sugars amounted to $10,000.” ‘ Not an ounce of adultera- 
tion enters into my factory, or goes.into the sugars I produce.” Mr. 
Havemeyer doubtless forgot that a large shipment of poor sugar, 

‘aised to a high grade by the use of a solution of tin—that i is, tin dis- 
solved in muriatic acid, called “muriate of tin”’—and other poison- 
ous compounds, was recently returned to New York from Texas, to 
be sold at any price, having changed color to low grade, and become 7 
unfit for sale entransit to its destination. Mr. Havemeyer also seems 
to have lost sight of the notorious fact that solution of tin in carboys 
is regularly sold to, and regularly used by refiners of low grade su- 
gars, to lighten them in color, and that sulphuric acid and bisulphate 
of lime are extensively used for similar purposes. 

Mr. Havemeyer having placed himself on record again on the de- 
fensive, as above stated, the substantial evidence presented to Chair- 
man Wood by Mr. Booth becomes interesting and valuable. The fol- 
lowing excerpts are from the full official report of Mr. Booth’s testi- 
mony, as given before Wood’s Committee of Investigation of customs 
business at New York, Sept. 18, 1878: 


Mr. Booth—In regard to Mr. Hist aisor) Dutcher’s testimony given here the day 
before yesterday, he is reported as stating that no complaints have ever come to him 
in regard to this matter of fraudulent impor rtations. During the month of August, 1877, 
my father and myself went to his office at_his request to express our opinion in 
regard to some Demerara cargoes of colored sugar which had been seized by order 
of “he Government, and at the close of the conversation on that point we remarked. 
to him that this Demerara business was a mere bagatelle, and that the Government 
were unwise in ‘wasting their strength on that while there existed in the business of 
importing sugars in this country ‘such serious frauds. I then stated to him that 
time and time again during the year 1877, our firm had offered to us, sugars, cost and 
freight laid down here, guaranteed to be fair to good refining, and guaranteed to 
pass s the Custom House at 1g duty, and I remarked ‘that he and every one else knew 
that that could not be done “honestly. The fact is that these offers came to our office 
until we said: ‘That business cannot be done honestly,” and then such offers ceaséd 
to be made. 

Now, I wish it understood that I appear here as a sugar refiner, and I speak asa 
refiner. When it is understood that the refiner has been in the habit of taking the 
sugar to his dock, that that dock is almost exclusively for the use of the refiner, and 
that there those sugars can be lanied, and weighed, and sampled, and. passed into 
the refinery in a very short time, and that instances have occurred where within . 
twenty four hours of the time when the sugars were landed at the refiner’s dock they 
were melted, and all chance of identifying “them lost, it will be seen that the refiner. 
has an advantage which the importer has not. 

In regard to Mr. Havemeyer’s testimony here yesterday, 1 think there is an error 
in that too. .Mr. Havemeyer is reported as saying that uot.a pound of. adulteration 
ever entered his refinery. Is that your testimony, Mr. Havemeyer? 

Mr. Havemeyer—That is my testimony. . 

Mr. Booth—Do you mean by that statement that not a pound of adulteration has 
ever entered your refinery ? 

Mr. Havemeyer—I mean that not a pound has ever entered my refinery to be 
used in sugar. 

Mr. Booth—Or in the produet of your refinery ? 


1] 


Mr. Havemeyer—In the product of my refinery. 

Mr. Booth—Sugar or syrup ? 

‘Mr. Havemeyer—Sugar. 

‘Mr. Booth—Not syrup ? 

Mr. Havemeyer—Not syrup. The question was about sugar. 

Mr. Booth—I think the question was about the adulteration of sugar, or of any 
of the products of your refinery. 

Mr. Havemeyer—No, sir; it was about the adulteration of sugar for export, and I 
said that not a pound of adulterating matter entéred into the sugar produced by our 
refinery for export, and I say so now. Iam not here for a cross examination, lane. 
ever. 

Mr. Booth—No; but as I noticed that you were whispering to Mr. Wood and 
suggesting questions to be put to me, I thought I would give youa turn. I under- 
stand now that you wish to change this statement and to confine it to sugars for 
export. 

Mr. Havemeyer—I only said that no adulteration entered into our sugars for 
export. 

Mr. Booth—But for syrup such matters have been used ? 

Mr. Havemeyer—For syrup we used what you did, a little sulphurie acid to 
reduce the crystallization. 

Mr. Booth—Nothing else? 

-Mr. Havemeyer—Nothing else. 

Mr. Bootbh—No tin? 

Mr. Havemeyer—N0 tin, not lately. 

Mr. Booth—Ah! “not lately.” 

Mr. Havemeyer— About five years ago we used tin, and our chemist left us and 
went to Booth & Edgar and others, taking with him our secret. Ido not know how 
much Booth & Edgar paid him, but others paid him fifteen hundred or two thousand 
dollars for a secret which belonged to us. 

Mr. Booth—Are you under oath now? 

° Mr. Havemeyer—No, I am not under oath now? 

Mr. Booth—Then I object to your making any statements of that kind here. We 
never had but one chemist in our employ, and that was Dr. Chandler, the President 
of the Board of Health of this city. oe 

Mr. Havemeyer—-I reiterate my statement made here yesterday under oath. 

Mr. Booth—Before I proceed with the main subject, I would like to correct what 
[regard as another erroneous statement made by an importer here yesterday, 
namely, that there are rarely two colors of sugar in mats and bags. 

- Mr. Havemeyer—What I said was that there were no foots. 

Mr. Booth—Mr. Chairman, I state here that there are rarely any cargoes of mat 
sugars or bag sugars which do not contain at least two colors, and in many instances 
they contain more than two colors. There is very rarely a cargo of Pernambuco 
Sugar received at this port but that when the sampler of the broker and the sampler 
of the refiner are sent on board the vessel they are instructed to take off the sugars 
on the upper part and go down into the heart of the cargo in order that a fair sample 
may be obtained. I would also state that there is hardly a cargo of Manilla sugar 
received here that does not contain two colors. The very fact that that cargo is put 
into a ship and sent through warm and cold countries makes it sweat, and the result 
is} part of the sugar is necessarily worse than the rest of it, and there is just as much 
room for fraud in the importation of Manilla sugars as there is inthe importation of 
hogheads from Cuba with their foots. Thatis a fact, and there is not a man _ here 
who deals in sugars who can deny it. The difficulty of furnishing proof in regard to 
this matter of fraud is very great. It was only to-day that a man, who has sat in 
thisroom and has heard the testimony that has been given here, said to me, “I 
would like to testify there, but I dare not. I amin business here, and if I go in there 
and tell what I know about this sugar question, my business is gone and | cannot 
afford to testify.” This matter of fraud in sugars has been running through the bus- 
iness here for ten years. It is now ten years since aman said tome: ‘There are on 
the docks in Brooklyn Melada hogsheads with the bungs timned over which I have 
looked into and they contained centrifugal sugars.” I wish to.say here that in any 
remarks I may make in regard to government officials or in regard to these samplers, 
these poor men whose bread and butter depends on their position and who hold 
their positions only as long as the influence of certain men can be retained on their 
side, do not mean to hold them up as the principal offenders. I have great sym- 


LIBRARY 


UNIVERSITY OF ILLINOIS 
AT URBANA-CHAMPAIGN 


12 


pathy for them. ‘Their position has been a hard one. They have been exposed to 
influences which I pray God I may never be exposed to. Theirs is a hard case and I 
wish to speak of them tenderly and with pity. But for those men in this city who 
have connived at fraud, who have allowed their clerks and their employees to go to 
these poor men and bribe them, and then when the charge of fraud is brought 
against them, claim that it is a matter of collusion between the Custom House officers 
and their own clerks. Words fail me to express my contempt. I feel deeply in this 
matter. I have been at work for a good while lookinginto it. Ian known to all these 
gentlemen here present. For twenty-five years I have gone in and out here engaged 
in this sugar business; I am, I believe, the oldest man to-day who has bought for re- 
fining in the city of New York; I probably have passed upon as much sugar_as any 
man inthe business; I have always maintained a good reputation, and I doubt 
whether there is a man here to-day, who, when I assert that I know a thing will say 
that he has any doubt about it. Now, I do say that I know that there have been 
frauds in this sugar business; I know that the government has been robbed and I 
know that unless this matter is taken up and unless these abuses are rectified by the 
Government, more men must come to grief than have already come there. The infor- 
mation which I have on this subject is confidential and cannot be used at present, 
but Iam perfectly certain that if the Committee of Ways and Means shall take up 
this question, with power to compel men to answer and to punish those who testify 
falsely, they will be able to furnish to the people of the United States some reading 
that will be truly wonderful. There is another side to this question. If you have 
read the papers you have seen allusions made to adulterations of refined sugars. 

The Chairman—All that we want at present is any information which bears upon 
the better collection of the revenue and the prevention of frauds. 

Mr. Booth—Well, as we proceed you gail see that fraud on the revenue is the 
father, adulteration of refined sugar is the mother, and the polariscope is the child. 

The Chairman—Give us the whole family. 

Mr. Booth—Thank God, sir, there has never been but one child and we propose 
to introduce a new race and new blood. Tsay that adulteration of refined sugars 
is the mother. Would you like to see her sir? Here is a piece of her that I picked . 
up this morning. [Producing a small paper of whitish powder.] Taste of it. Here 
is the ‘‘well-known sweet. crystalline substance, manufactured chiefly from sugar 
cane!” I said that fraud on the revenue was the father. He had two wives. Would 
you like to see another one of them? 

The Chairnanu—Yes. i . The: 

Mr. Booth—Here it is—tin! [producing a chemist’s vial containing a sample of 
tin.] and here is another [producing a smaller vial of tin.]_ I tell you sir that adul- 
teration of sugar does concern the Committee of Ways and Means; it concerns the 
Board of Health, it concerns everybody. This sample that I have shown you came 
from a gallon of syrup made by a sugar refiner in this city. It was sent to Dr. 
Chandler, the President of the Board of Health, analyzed by him, and ‘returned to 
me, and the refiner who made the syrup when he discovered that I had the sample 
laughingly said, “J didn’t think you could find it, but you can’t find it now.” I got 
another sample of his syrup and sent it to Dr. Chandler and from that came this 
smaller tin wife that I eae shown you. This question of adulteration has become 
of national importance. The people of the country are deeply interested in it aside 
from these statements which you see in the papers. Within the last twelve months 
more refined sugar has been returned to the refiners of this country from the com- 
sumers as unfit for use than in any ten years preceding. I know to day of an invoice 
of refined sugar coming back from Texas ith the instruction from the purchaser: 

‘* Sell it for what it will bring. I can’t use it.” I stand here to day as a refiner, to 
plead for a uniform rate of duty on all sugars up to No. 16, excluding foreign refined 
sugars. I claim that a uniform rate of duty on all sugars up to No. 16 will save the 
refining business and give the people of this country an opportunity, of using for- 
eign raw sugars if they wish to, thus tending to elevate this refining business into an 
art instead of degrading it as it is now being degraded. Do you ask me whether I 
believe that the refiners adulterate their sugars? Do you ask me whether I know 
how they do it? [tell you, Yes, Ido. I know thatthey adulterate their sugars and 
I know how they doit. You may blindfold me asI stand here now and I will go 
with you into the houses of one of the largest refiners in the neighborhood of New 
York and put your hand on the place where the job is done. I know what I am 
talking about, and I know that itis not bosh. Ihave had men come to me week 
after week, offering me this and that adulteration and saying, “ Others use it. I 


oe 
~ 


. 
) 


sell carload after carload of it to this concern and that concern. They are all using 
it in large quantities.” My position as a refiner has been such that I have been en- 
abled to know just about what was going on in regard to this glucose business, and 
I think we shall all hear more about it by and by. Then as to fraud, there is not a 
man in this room who knows anything about the business who does not know that 
frauds are committed. A man came into our office the other day and said, speaking 
about these frauds, ‘‘Itis not good to do this but ‘they all doit.’” I understand 
there is a regular tariff over there in Brooklyn under which the thing is done, and I 
am told that there is evidence of it. Now in regard to the question what will be the 
effect of a uniform rate of duty on all sugars up to No. 16, as regards low grade 
sugars? I don’t know what Mr. Turnure testified here, but I do know that every 
time that this question of tariff has been up among us at the lower end of the street 
Mr. Turnure has been in favor of a uniform rate of duty on all sugars, at least up to 
No. 16 until the commencement of 1878. It is a matter that I have thought of and 
canvassed long and carefully. I have a refinery that is competent to work either 
poor or good sugars, so that [am unbiased in that respect, and I give you my judg- 
ment, after due deliberation, that a uniform rate of duty on all sugars up to No. 16 
will not necessarily exclude common sugars from this market. The weight of the 
testimony is that the common sugars will come here. We shall have sugars testing 
98 brought here and coming in as number 16, and if the trade of this country de- 
mands low grade sugars, low grade sugars will come in to meet the demand, by a 
law of trade which is as unchanging as the laws of nature. Where there is a de- 
mand for an article, that article comes. If we put this uniform rate of duty into 
operation what will be the effect? The low grade sugars, which are full of dirt, and 
which are not fit to go into consumption, will shrink in price in the foreign market 
and the load will go where it ought to go, on the producer, and we shall no longer 
bring dirt into this port and pay for it at the rate of five or six cents a pound, in 
gold. Ihave set down on paper some suggestions that I would like to offer, and ] 
offer them after careful consideration of the whole subject. I would suggest: 

1. No more sugar landed at refiners’ wharves. 

2. If possible, persuade the merchants of the United States to buy and sell on 
Custom House weights and Custom House tare. 

3. Let the Government be a little liberal and weigh the sugars when they come 
out of bond instead of when they go into bond. The Government can afford to do 
that, because if we get the business down on to a square, honest basis, they can get 
all the revenue they want out of sugar at about two cents a pound. 

4, Place a uniform rate of duty on all sugars under number 16, Dutch standard, 
in color, and add a clause which shall prevent the importation of refined foreign sugars. 

After due reflection, I am satisfied that these changes will help the business, will 
stop the frauds in importations, and will also stop the adulterations, because when 
the people of the country know that if the refiner’s product is not satisfactory they 
can use foreign raw sugars instead, the refiner will very soon discover that he must 
make his sugars good enough to satisfy the people, and I for one, as a refiner, have 
no fear of the competition of foreign raw sugars. I believe that the refining interest 
of this country is skillful enough and enterprising enough to retain the trade which 
we have got, and with a uniform rate of duty on all sugars up to number 16, I be- 
lieve we can force the people to consume our refined sugars in preference to any 
others, because we can give them a pure article in good shape and at a cheap price. 


It is proper, and a fitting sequence to the above unimpeachable tes- 
timony, to present the following circular, which was issued after Mr. 
Booth’s statement had been made to Mr. Wood’s committee, and pre- 
sented to the public. The notice is as follows: 

‘Tn view of the assertions circulated through the press charging 
refiners in a general way with adulterating their sugars, we, the un- 
dersigned, consider it a duty we owe to ourselves and the public to 
refute such imputations, and do hereby declare that refined sugars 
sold by us are not, nor at any time have been, adulterated.” 

(Signed,) HAVEMEYER & ELDER. 
THE DrEcASTRO & DONNER REFINING Co. 


14 


THe F. O. MATTHIESSEN WIECHERS SUGAR REF’G Co. 
THE BROOKLYN SUGAR REFINING Co. 


As a disclaimer, the above card amounts to nothing, inasmuch as 
the refiners who sign the card have not been constituted champions 
of the sugar trade of the country; neither have they as yet been 
called upon individually or specifically to defend themselves against 
the already surging waves of popular indignation in regard to poison- 
ous adulterations of refined sugars, and robbery of revenue by 
duty-stealing and drawback-filching practised in the evasion of duty 
by false classification of imported sugars; to reduce the grade for levy- 
ing duty thereon, and in obtaining drawback in excess on exports of 
refined sugars by the use of poisonous adulterations to raise the grade, 
and of glucose, starch and flour of trifling value comparatively, to re- 
duce the volume of pure sugar in the refined article. 

As regards the specific evidence of these impositions upon the 
people, the relation of Government officials to the perpetrators thereof, 
and the responsibility for their continuance, they will be presented at 
the proper time before the proper tribunal, in the interests of the pub- 
lic; and here for the present I leave this vital part of the sugar ques- 
tion for the consideration of the people and their representatives in 
Congress. 


SOME IMPORTANT FACTS ABOUT 
POLARISCOPES AND POLARIZA TLGN. 
APPLIED TO SUGARS. 


DUTY, DRAWBACK, AND REMEDIES. 


Webster describes the polariscope to be ‘an instrument consist- 
ing essentially of a polarizer and an analyzer, used for polarizing light 
and analyzing its properties ;” such an instrument, adapted to the 
analysis of cane sugar in solution, is used for determining the percent- 
age of pure saccharine matter in a given volume of sugar of cane 
solution. The process is as follows, the proportions being always ne- 
cessarily the same, in order to insure accurate results : 

Weight of sugar crystals, 26,048 grammes; dissolve in 100 cubic 
centimetres of water: add acetate of lead sufficient to precipitate ; filter 
through prepared bone dust to clarify ; fill a glass tube, 200 millime- 
ters in length, with the solution, and place the same in the polari- 
scope ; turn on the light, look through and adjust the instrument until 
both hemispheres present to the eye precisely the same shade of 
color; the test is then perfected, and the result will be found regis- 
tered in degrees and fractions on the scale attacbed to the polariscope, 
and may be read through the magnifying tube; 100 represents en- 
tirely pure sugar crystals i in solution. 


LD 


So delicate and sensitive an instrument as the polariscope is valu- 
able for purposes of chemical analysis ; but for testing imported sugars 
for the purpose of levving duty thereon, or for sale, it would be im- 

possible to devise any other method whereby the Government, the im- 
_ porter, or the buyer, or all together, could be defrauded with such per- 
fect ease and safety, as through the means afforded by the use of the 
polariscope; and against the dangerous temptation to fraud thus 
offered, there exists no adequate check or hindrance. 

For instance, the operator adds a few drops more of water than 
the proper quantity, and the grade is lowered; or a few grammes of 
sugar more than the proper quantity, and the grade is raised; the 
operator may if he prefer slightly adulterate high grade sugars and 
thus lower the grade for duty, and vary the practice at pleasure ; nor 
is this all; the color test in the instrument, provides fresh opportunity 
for both error and fraud; only the most accurate eye and skillful ad- 
justment can exactly determine the perfect color blending which marks 
the record of true grade upon the scale; and the slightest deviation 
therefrom, raises or lowers the grade at the pleasure of the operator ; 
detection is next to impossible. 

For the purpose of levying duty on sugars, the Dutch Stand- 
ard for determining grade is bad enough, but the use of the Polariscope 
will make matters infinitely worse, and furnish a vehicle for the safe 
practice of fraud indiscriminately upon the revenue, the importer, the 
buyer,and the consumer, at the option of operators and their instigators. 


DUTY, DRAWBACK, REVENUB, BTC. 


Practicable remedies for these public abuses and evils as regards 
sugar frauds are at hand, and their application has at length become 
an imperative necessity in order to protect the public from poisonous 
adulterations, and the customs revenue from robbery of at least nme 
or ten millions of dollars per annum by evasion of duty on imported 
sugars, and by drawback stealing on refined sugars exported, in excess 
of duty paid. 

It is practicable, equitable, and safe, for the purposes named, 
to adopt a uniform specific duty upon all grades of imported sugars up 
to No. 16, D.S., and also to establish a uniform specific drawback 
based on duty paid, regardless of grade and of cargo identity, upon all 
refined, sugars exported from the United States which are the actual 
product of sugar refineries in this country. 

Equitable grading, with various rates of drawback, and requiring 
the positive identification of cargoes by the Government for drawback 
purposes, has proved to be utterly impracticable, and it is absolutely 
impossible to protect the revenue unless a uniform duty and drawback 
is adopted. 

- The duty on sugars up to, and ineluding No. 16, D. S., ought not 


16 


to exceed 2 (two) cents per lb.; the average annual consumption of 
sugar and Melada during 1875, 1876, 1877, three years, which was of 
sugar 1,531,054,115 lbs., and of Melada 73,182,469 lbs., total average 
1,604,236,584 Ibs. would produce at 2c. per lb. $32,084,731 of revenue 
per annum from such sugars, which under a uniform duty could be 
fully collected. 

It is sheer nonsense to pretend that a uniform duty will exelude 
low grade sugars; it will simply reduce their price in the market of 
production to American buyers, and to a degree induce foreign pro- 
ducers to make cleaner sugars in order to obtain better prices for their 
products. 

Consumers of sugar in this country, should: look with care to the 
refined article which they buy, and not be misled by plausible sophis- 
tries about low grades of raw sugars, say below No. 13, D. S., which 
they have had neither desire nor opportunity to buy, and are not likely 
to have; if refiners are forced to use cleaner sugars and pay full duty 
thereon, to prevent consumers from buying No. 16, D. 8., so much the 
better for both revenue and+people. 

Sugars above No. 16, D. S., should pay 4 (four) cents per Ib. duty 
to protect the refining interests of this country ; this added to the duty 
on sugars up to No. 16, D.S., and on molasses, would produce fully 
$35, 000, 000 of revenue per annum from sugars and molasses, less the 
the ‘drawback, say $2,000,000 ; leaving a nett yearly revenue of about 
$33,000,000 from ‘imported sugars and molasses. 

In 1877 the Customs Revenue from the articles named was as 
follows: Duty received from sugars, $34,337,350; from molasses, $1,- 
812,525; from Melada $930,944 ; total $37,080,819, less drawback pay- 
ments in 1877, $2,253,959, nett revenue from dry and wet sugars and 
and molasses in 1877 fiscal year, $34,826,860. 

It will be seen that 2c. per lb. duty on all sugars to and ineluding 
No. 16, D. S., 4c. per Ib. duty on all higher grades, and the present 
duty on molasses, will produce at least $33,000,000 nett duty from 
these articles ofter deducting drawback ; and that said duty can be 
fully collected ; common sense teaches that this is a sufficient duty tax 
upon a single article of public necessity. 

The monstrous publie abuses and evils engenderd by the long 
continued practice of sugar frauds, which hang about. the nation, de- 
stroy official integrity, imperil publie interests, deplete the Treasury, 
and endanger the very lives of the’ people, are among the natural 
results of a ponderous and unjust Tarifft—Executive maladmin- 
istration of the Customs Service of the country—unprincipled trade 
combiné and individual chicanery; and the only remedy for 
such complicated evils is for Congress to render their continuance 
impossible under any administration. 


HENRY A. BROWN, SAXONVILLE, MASs. 


